Incentive marketing can be a powerful tool for companies. But what exactly is it? And what should you remember when using it in your marketing strategy?
Chances are you've heard the term 'incentive marketing' at one point or another. It is an effective tactic used by companies everywhere. According to the Incentive Marketing Association, in America alone businesses spend around USD $76.9 billion annually on incentives - including merchandise and gift cards.
But what is incentive marketing exactly? The Business Dictionary defines it as:
"Use of motivational devices such as competitions, games, premiums, special pricing, to promote the sale of a merchandise or service."
Whether this takes the form of a customer loyalty program or a one-off promotion, businesses put out special offers to incentivise customers to purchase their products. In a world where consumers have more choices than ever, incentive marketing helps businesses grab the attention of customers with special deals or opportunities.
"Loyalty and incentive programs have become 'must-haves' due to the associated performance metrics for businesses that implement them, and the fact that consumers have come to expect a loyalty offering or savings opportunity from the businesses that they engage with," explains Doug Spear, executive vice president of Linkable Networks in an interview with Business News Daily.
"Using incentive marketing can help improve overall customer loyalty."
What do you need to know?
Now that you know what incentive marketing is (and why it's worth utilising) it's time to take a look at some of the need-to-knows. MarketingProfs recently interviewed B2B sales lead marketing expert Mac McIntosh - together they created a list of cardinal rules when it comes to incentives. Here are a few of the key takeaways:
Incentives should always relate to your offerings
Be smart when you craft your incentives. It's easy to throw free stuff at people but it's not the smartest approach to rewards. You should always link back your incentives to your business, explained MarketingProfs. For example, incentivise customers by promising 20 per cent of their next purchase when they spend $100 or more today. Rewards along these lines not only encourage your audience to buy things in the moment, they prompt them to keep buying in the future.
"It's easy to throw free stuff at people but it's not the smartest approach to rewards."
Incentives should attempt to answer big pain points
Take the time to think about the biggest problems the customers in your industry face. MarketingProfs uses the example of software customers. Generally speaking, the issue falls with companies promising a platform will do X,Y,Z and then delivering a product that doesn't quite fit the bill. This pain point can be addressed by incentivising your customers with a quality promise. "If our software doesn't deliver X,Y,Z properly, we will provide you with free consultations for a year."
Incentives should be simple
If you want people to take advantage of your incentives you need to make sure you communicate them in the simplest and most direct way possible. According to MarketingProfs, the most effective incentives are one declarative sentence. For example:
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"Buy one pair of jeans, get the second free."
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"Sign up today and get your first month free."
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"Register by tomorrow and get your next kitchen product half price."
"You can still have cool and inventive incentives, just make sure they are communicated quickly and clearly."
While the process behind crafting your incentives may be complicated, your audience message shouldn't be.
Get started with Power2Motivate
Here at Power2Motivate we've been working with companies to create effective incentive marketing strategies for years. Whether it is selecting the right rewards from our extensive gallery or building a tailored platform for customer loyalty programs - we've got you covered. To learn more about how Power2Motivate can help you get started on your incentive journey reach out to one of our reps today!